Oil prices posted their steepest decline in nearly three weeks as traders monitored India's purchases of Russian crude, while a sharp drop in refined product markets weighed on the broader energy sector.
WTI crude futures fell 2%, settling near $59 per barrel, also pressured by declines in U.S. equity markets. Despite facing severe sanctions over its conflict with Ukraine, Russian President Vladimir Putin last week pledged uninterrupted supplies to India. With U.S. trade negotiators arriving in India, Russian oil supplies to the country are likely to become a key discussion topic.
"Supply glut concerns may materialize, especially as Russian crude and refined products eventually circumvent existing sanctions," said Vivek Dhar, analyst at Commonwealth Bank of Australia. He projected this could push Brent crude futures toward $60 per barrel by 2026.
In refined products, gasoline futures dropped 2% on Monday after hitting their lowest level since May 2021 last week. Diesel prices also weakened, dragging down the broader energy commodities complex.
Potential peace negotiations between Ukraine and Russia remain a market focus. U.S. President Trump expressed disappointment with Ukrainian President Zelensky's handling of a proposed U.S. peace deal.
Both WTI and Brent crude have remained below their 100-day moving averages for their longest stretch in nearly a year, reflecting persistent bearish sentiment ahead of an anticipated supply surplus.
January WTI crude fell 2% to settle at $58.88 per barrel, while February Brent declined 2% to $62.49.
Comments